Direction November/December 2017 - 31

(excluding administrative vehicles),
packing/warehouse supplies, claims,
other transportation expenses and
owner/operator expenses. Indirect
expenses include administrative wages,
advertising, bad debts, utilities, legal,
accounting, travel, entertainment, office
expense, professional fees, rent, etc.
If your income statement does
not look like this, then ask your
accounting manager to reformat it. It
is essential to helping to preserve your
profit margins.
Track your gross profit margin
(gross profit divided by revenue).
You should know not only what
it is, but also what it should be in

your company. This is the single
most important thing you will do
to preserve profit margins, because
a decline of 1 percent or less in
your gross profit margin has a huge
impact on your operating and net
profit margins.
Unfortunately, I have never met
a CEO who could tell me what the
gross profit margin should be for their
company, and because there is so little
emphasis placed on it, there is no
available data on what a good gross
profit margin for the industry should
be. This is a serious shortcoming for
the moving industry. Based on my
experience with a relatively small

sample size, the average gross profit
margin is somewhere around 35 to 45
percent. If we knew this number with
greater certainty, the entire industry
would be more profitable because
firms would be more knowledgeable
about pricing their services.

NOVEMBER | DECEMBER 2017

Revenue - Direct Expenses = Gross Profit (Profit Level 1)
Gross Profit - Indirect Expenses = Operating Profit (Profit Level 2)
Operating Profit ± Other Income/Expenses = Net Profit (Profit Level 3)

COSTS ARE GOING
UP IN 2018, AND
YOU NEED TO
ADJUST PRICES
ACCORDINGLY;
OTHERWISE, YOUR
MARGINS WILL
OBVIOUSLY DECLINE.

31
Direction

Profit Levels Explained


http://www.plycongroup.com

Table of Contents for the Digital Edition of Direction November/December 2017

FROM THE PRESIDENT
INDUSTRY NEWS
WHAT’S NEW AT AMSA
AMSA PARTNER PROFILES
Piloting Profits
Challenged by Change? We’ve Got This!
WASHINGTON WATCH
ADVERTISERS’ INDEX
FAST FACTS
Direction November/December 2017 - Cover1
Direction November/December 2017 - Cover2
Direction November/December 2017 - 1
Direction November/December 2017 - 2
Direction November/December 2017 - 3
Direction November/December 2017 - 4
Direction November/December 2017 - 5
Direction November/December 2017 - 6
Direction November/December 2017 - 7
Direction November/December 2017 - FROM THE PRESIDENT
Direction November/December 2017 - 9
Direction November/December 2017 - INDUSTRY NEWS
Direction November/December 2017 - 11
Direction November/December 2017 - 12
Direction November/December 2017 - 13
Direction November/December 2017 - AMSA PARTNER PROFILES
Direction November/December 2017 - 15
Direction November/December 2017 - 16
Direction November/December 2017 - 17
Direction November/December 2017 - 18
Direction November/December 2017 - 19
Direction November/December 2017 - 20
Direction November/December 2017 - 21
Direction November/December 2017 - 22
Direction November/December 2017 - 23
Direction November/December 2017 - 24
Direction November/December 2017 - 25
Direction November/December 2017 - 26
Direction November/December 2017 - 27
Direction November/December 2017 - Piloting Profits
Direction November/December 2017 - 29
Direction November/December 2017 - 30
Direction November/December 2017 - 31
Direction November/December 2017 - 32
Direction November/December 2017 - 33
Direction November/December 2017 - 34
Direction November/December 2017 - 35
Direction November/December 2017 - Challenged by Change? We’ve Got This!
Direction November/December 2017 - 37
Direction November/December 2017 - 38
Direction November/December 2017 - 39
Direction November/December 2017 - WASHINGTON WATCH
Direction November/December 2017 - 41
Direction November/December 2017 - 42
Direction November/December 2017 - 43
Direction November/December 2017 - 44
Direction November/December 2017 - 45
Direction November/December 2017 - ADVERTISERS’ INDEX
Direction November/December 2017 - 47
Direction November/December 2017 - FAST FACTS
Direction November/December 2017 - Cover3
Direction November/December 2017 - Cover4
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https://www.nxtbook.com/ygsreprints/AMMOV/direction_mayjune2018
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https://www.nxtbook.com/ygsreprints/AMMOV/direction_novdec2017
https://www.nxtbook.com/ygsreprints/AMMOV/it_issue2_2017
https://www.nxtbook.com/ygsreprints/AMMOV/direction_septoct2017
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https://www.nxtbook.com/ygsreprints/AMMOV/direction_mayjune2017
https://www.nxtbook.com/ygsreprints/AMMOV/direction_marapr2017
https://www.nxtbook.com/ygsreprints/AMMOV/it_issue3_2016
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https://www.nxtbook.com/ygsreprints/AMMOV/direction_julaug2016
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https://www.nxtbook.com/ygsreprints/AMMOV/direction_janfeb2016
https://www.nxtbook.com/ygsreprints/AMMOV/direction_novdec2015
https://www.nxtbook.com/ygsreprints/AMMOV/it_issue2_2015
https://www.nxtbook.com/ygsreprints/AMMOV/ammov_sepoct2015
https://www.nxtbook.com/ygsreprints/AMMOV/it_issue1_2015
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https://www.nxtbook.com/ygsreprints/AMMOV/g39757_ammov_marapr2014
https://www.nxtbook.com/ygsreprints/AMMOV/g39097_ammov_janfeb2014
https://www.nxtbook.com/ygsreprints/AMMOV/AMMOV_IT_2013_V3
https://www.nxtbook.com/ygsreprints/AMMOV/AMMOV_IT_2013_V2
https://www.nxtbook.com/ygsreprints/AMMOV/g38015_ammov_direction_novdec2013
https://www.nxtbook.com/ygsreprints/AMMOV/P36576_AMMOV_IT_2013
https://www.nxtbook.com/ygsreprints/AMMOV/g36367_ammov_direction_sepoct2013
https://www.nxtbook.com/ygsreprints/AMMOV/g35144_ammov_direction_julaug2013
https://www.nxtbook.com/ygsreprints/AMMOV/AMMOV_IT_2012V4_FP2
https://www.nxtbook.com/ygsreprints/AMMOV/g34598_ammov_direction_mayjun2013
https://www.nxtbook.com/ygsreprints/AMMOV/g33091_ammov_marapr2013
https://www.nxtbook.com/ygsreprints/AMMOV/g31497_ammov_janfeb2013
https://www.nxtbook.com/ygsreprints/AMMOV/g25957_ammov_direction_mayjun2012
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